Insisting he would stay in his post, Nicholson told the Health Select Committee the NHS was facing "its greatest challenge" in the coming days, as a huge reorganisation of its structure comes into place.

He said: "I promised both the Government and the NHS that I would see that through and I am absolutely determined to do that over the next period."

He said a reported £500,000 pay-off had not been sanctioned by the Department of Health. But its recipient, former Lincolnshire Hospitals chief executive and whistleblowing campaigner Gary Walker, immediately contradicted him.

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Nicholson said successive restructures of the NHS had been a problem, and admitted the organisation's leadership had "lost its focus".

He reiterated his apology over what had happened at Mid Staffs, but said the regional health authority he was in charge of had been unaware what was going on at the trust.

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He added: "I had no idea. The information was not brought to the SHA that would lead you to believe that this was going on in Mid Staffs.

"As shocking as it is, that's the truth."

Tory MP and GP Sarah Wollaston asked him directly to consider his position, given the "excess deaths" being investigated.

He responded: "I think I have a duty and a responsibility to manage the organisation over these great changes.

"I also think that, if you look at my record of what I've actually done, you can see that I absolutely get the changes that need to happen to the NHS."

Julie Bailey, who set up the Cure The NHS campaign group after her mother Bella died at Stafford Hospital in 2007, said: "That man is an absolute disgrace."

Asked about suggestions that he would stay in post to lead reform of the NHS, she replied: "I think it's just laughable. He is desperate to carry on in his job."

She added: "We need to get rid of him. Nothing will change. He is part of the problem, not the solution."